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The number of strategic partnerships between organisations is increasing, but failure rates remain high. The pressure is on HR directors to mobilise and manage their employees, increase knowledge-sharing and learning capabilities, and ensure HR structures and processes make partnerships work. That’s according to new research launched today at the CIPD’s Annual Conference and Exhibition. 

‘Organising HR for partnering success,’ the second part of a research project in the Beyond the Organisation series, by the CIPD, the professional body for HR and people development, in collaboration with Prof. Paul Sparrow at the Centre for Performance led-HR at Lancaster University, explores the reasons behind high partnership failure rates and offers recommendations on how HR can strengthen collaborations. The number of partnerships (including joint ventures, outsourcing, strategic alliances, and public–private sector commissioning models) is increasing, yet the failure rate of these arrangements is between 60% and 70%¹.  Unsuccessful partnerships waste time and damage relationships, and ultimately therefore do not serve customers.  What can HR do to improve their success?

Dr. Jill Miller, CIPD research adviser and co-author of the research, said: “In partnering arrangements, HR finds itself not only responsible for the design and delivery of the people agenda in their own organisation, but also across the partnering network. This more complex way of working presents significant talent management and structural challenges for the function.

“Managers’ roles also become more intricate in partnering arrangements, often managing teams which include those who report directly to them as well as people employed by a partner organisation. Employees may have a crisis of ‘dual identity’, experiencing HR practices and approaches from both their home and host organisations.

“As the nature of work changes, with organisations operating in a more specialised, networked way, HR directors firstly need to ask themselves if their existing HR structures, policies and processes support partnership working. They need to be involved from the outset of the partnership to work out how they can best support its success, including if a fundamental shift is required in the way they operate. HR needs to ensure they recruit and develop the right people to become leaders who are able to balance the competing demands placed on them from their ‘home’ organisation with the goals of the network, and who will set the appropriate behavioural standards for the network.

 “However, despite potential complications, working in a strategic partnership can be a great opportunity for HR and for professionals generally – opening up new opportunities, diverse job roles and opportunities for career progression.”

Professor Paul Sparrow, the Director of the Centre for Performance-led HR and Professor of International Human Resource Management at Lancaster University Management School, said: “With many of the common issues faced in partnering being people-centric, dependent on relationships and management behaviour, HR has the opportunity to make a significant contribution to their success. Our research uncovered three key areas most associated with partnering failure that HR need to focus their attention on: managing risk and opportunity, governance, and building capability for learning and knowledge-sharing”.

“The risks can be planned for much better – we have to think about the best ways to ensure co-ordination, communication, control, and capability across all the partners – and that means dealing with conflict and cultural problems.  Governance is a major issue – think about regulatory failures.  The same problem exists with strategic failure.  So governance needs to be built into the design of partnerships rather than something we all talk about after the failure.  Finally, these partnerships are built on the need to combine capabilities in novel ways across partners, and that demands a lot of attention to learning.

“Someone needs to oversee all the parties involved in the people-related aspects of the collaborative business model and if HR doesn’t adopt this role, someone else will. With the prevalence of partnering still increasing, supporting these arrangements needs to become a core HR capability.”

The CIPD is conducting practical case-study research into how organisations practically manage the challenges and opportunities of strategic partnerships, and will publish its findings in 2014.

¹ Hughes, J. and Weiss, J. (2007) Simple rules for making alliances work. Harvard Business Review.

You can read the full report here